Nomura Holdings, Inc. · TSE:8604
Nomura — Q1 FY2011/12 Earnings Presentation
37 slides from Nomura's earnings presentation, 2011
Slide 1: 1
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Slide 2: Disclaimer
= nonura | ™ This document is produced by Nomura Holdings, Inc. (“Nomura”). Copyright 2011 Nomura Holdings, Inc. All rights reserved. ® Nothing in this document shall be considered as an offer to sell or solicitation of an offer to buy any security, commodity or other instrument, including securitie
Slide 3: Outline
Outline | Presentation } | Financial Supplement | © Highlights (P4) © Consolidated balance sheet (p. 20) © Executive summary (P5) © Value at risk (p. 21) © Overview of results (P6) © Consolidated financial highlights (p. 22) © Business segment results (P7) © Consolidated income (p. 23) © Retail (P8-
Slide 4: First quarter highlights
This page sums up our first quarter highlights. In short, we faced a very challenging environment during the quarter. Page 5 gives you a more detailed outline. 4
Slide 5: Executive summary
Net revenue was 330.4 billion yen, up 27% year on year and 10% quarter on quarter. The higher figures include the effect from an increase in consolidated entities after Nomura Land and Building became a subsidiary. Income before income taxes rose 5.3 times from the first quarter last year to 34.4 bi
Slide 6: Overview of results
Page 6 gives an overview of our results. Net revenue was 330.4 billion yen, income before income taxes was 34.4 billion yen, and net income was 17.8 billion yen. First quarter annualized ROE was 3.4%. Pretax income includes a one-off gain of 24.3 billion yen from the consolidation of Nomura Land and
Slide 7: Business segment results
Page 7 shows business segment net revenue and income before income taxes. Next, I will outline the first quarter highlights for each business. Please turn to page 8. 7
Slide 8: Retail
In addition to the earthquake, Retail had to deal with historically high yen levels and a decline in trading value on the Tokyo Stock Exchange. In spite of the difficult environment, we saw new fund inflows in investment trusts and foreign bonds as well as robust sales of insurance products as we re
Slide 9: Retail sales by product
Please see page 9 for more details on sales by product. 9
Slide 10: Asset Management
Page 10 shows Asset Management. Inflows of 310 billion yen into public stock investment trusts such as the East Japan Revival Support Bond Fund, currency selection-type funds, and Japanese equity funds helped increase assets under management to 25.3 trillion yen. (+Y600bn from end Mar) Net revenue i
Slide 11: Asset Management investment advisory and trusts
In the investment advisory business, we won more mandates from pension funds worldwide and government entities and sovereign wealth funds in Asia and the Middle East to manage Asian equity products, which are performing well. As shown on the top right, investment advisory assets under management are
Slide 12: Wholesale overview
Net revenue increased 30% year on year to 141.2 billion yen, which was down 24% from last quarter. Pretax loss was 14.9 billion yen. It has been a very challenging market environment for Wholesale with the sovereign debt crisis in Europe, political instability in the Middle East, concerns of a slowd
Slide 13: Wholesale: Global Markets
In our Global Markets businesses, client activity was subdued market-wide, but revenue contributions from the US and the rest of our international business, coupled with disciplined risk management, meant our revenue declines were relatively small compared to our competitors. In Fixed Income, as rev
Slide 14: Global Markets revenue by region
In Global Markets, the share of revenues from the Americas is steadily increasing. Both Fixed Income and Equities are gaining market share, rising up industry rankings, and expanding client flows. Moving forward, we will work to further expand our international revenues while maintaining our solid r
Slide 15: Investment Banking
We saw revenue growth in our international businesses and diversified revenues from pull-through M&A deals with products such as leveraged finance solutions businesses. However, while gross revenue increased 11% year on year, it declined 41% quarter on quarter to 32.3 billion yen due to a drop off i
Slide 16: Investment Banking by region
In Japan, which was hit by sharp yen appreciation after the earthquake, we increased our dominant market shares compared to the same time last year. Outbound acquisitions and investments by Japanese companies have been on the rise due to the strong yen. We advised many blue-chip Japanese companies s
Slide 17: Non-interest expenses
First quarter non-interest expenses were 296 billion yen, up 13% quarter on quarter. Excluding the impact of the consolidation of Nomura Land and Building, expenses declined by about 3% from the previous quarter. Although compensation and benefits increased 7% to 136.3 billion yen, we continue to im
Slide 18: Robust financial position
As shown on page 18, our financial position remains robust. At the end of June, our Tier 1 ratio was 16.2% and. We had total assets of 39.7 trillion yen and shareholders’ equity of 2.1 trillion yen. Gross leverage was 18.9 times and net leverage was 11.6 times. Level 3 assets totalled 800 billion ye
Slide 19: Financial Supplement
= nonura Financial Supplement 19
Slide 20: Consolidated balance sheet
Consolidated balance sheet Consolidated balance sheet Assets Cash and cash deposits Loans and receivables Collateralized agreements Trading assets’ and private equity investments Other assets Total assets 1. Including securities pledged as collateral. Jun. 31, ‘Short-term borrow ings Payables and de
Slide 21: Value at risk
a nonura Value at risk = Definition = From April 1 to June 30, 2011 (billions of yen) ~ 99% confidence level (2.33 standard dev.) — Maximum: 7.7 ~ 1-day time horizon for outstanding portfolio — Minimum: 5.9 ~ Inter-product price fluctuations considered ~ Average: 6.6 Mar. 31 Mar. 31 Mar. 31 Mar. 31,
Slide 22: Consolidated financial highlights
Consolidated financial highlights Full year (billions of yen) (billions of yen) 400 2% = # we 83% 200 a | ™ "== Netincome (loss) s 134 % ROE (%) ® 37% Sa Ws “678 14% 200 10 2% 400 5 1% 600 23 000 Net revenue 10911 7873 «3126 1,1808 1,130.7 2598 2756 «= 2059 2084) 3304 Income (loss) before income tax
Slide 23: Consolidated income
Consolidated income (eitions of yen) [ay a] sa] a ia | Revenue Commissions 337.5 404.7 306.8 395.1 405.5 118.1 83.5 100.0 103.8 96.8 Fees from investment banking 99.3 85.1 55.0 121.3 107.0 20.4 24.9 34.0 278 13.8 Asset management and portfolio service fees 146.0 189.7 140.2 132.2 143.9 34.9 33.7 37.
Slide 24: Main revenue items
Main revenue items (billions of yen) La Cink Stock brokerage commissions (retail) 983 = 75.4 50.8 553 514 137 87 «6127S 163 87 Stock brokerage commissions (other) 732 1666 1447 1403 1446 403° 307 359 377 342 EE EREEEE Other brokerage commissions 68 93 79 80 15 22 18 23 53 25 Commissions for distribu
Slide 25: Adjustment of consolidated results and segment results
Adjustment of consolidated results and segment results: Income (loss) before income taxes fmonseryen) 18.2 FY20: FY2011.3 ie eae a nonura = 160.9 122.3 113.4 101.2 37.7 228 23.0 177 22.0 36.3 314 44 15.2 20.0 40 42 56 63 74 156.0 -150.1 717.3 175.2 67 414 76 10.8 29.4 14.9 353.2 33 695.0 303.8 1279
Slide 26: Segment "Other"
Segment “Other” Income (loss) before income taxes (bilions of yen) (bitions of yen) 40 40 [Net gain (loss) related to econome hedging transactions Realized gain on investments in equity 24 secures het’ hor paring purposes 18.4 18 24034 02 03) (07 04 03 o7 Equity in earnings of affiliates 53.2 47 (07
Slide 27: Retail related data (1)
Retail related data (1) (billions of yen) — See | Commissions 2514 225.9 151.0 238.9 2448 602 588 58.7 01% = -22.3% Sales credit 968 942 14 638 528 128 13.8 13.0 13.2 152 149% 18.0% Fees trom investment banking 24.0 149 134 336 423 94 12 110 107 62 419% 33.8% Investment trust administration fees and
Slide 28: Retail related data (2)
Retail related data (2) Stock br erage commissio Full year (billions of yen) and commissions for distribution of investment trusts’ (billions of yen) 70 60 50 Stock brokerage commissions 40 90 = Commissions fordistrbution of ib investment rts. 60 20 x 10 0 ° Stock brokerage commissions 137 Commissio
Slide 29: Retail related data (3)
Retail related data (3) tail client assets (trillions of yen) 100 © Other ™ Overseas mutual funds ” 704 = Bond investmenttrusts 60 ™ Stock investmenttrusts = Domestic bonds 40 = Foreign currency bonds = Equities 20 0 Equities 48.5 372 28.6 39.2 35.8 35.4 Foreign currency bonds’ 3.3 27 5.5 5.6 5.9 5.
Slide 30: Retail related data (4)
eS nomura | Retail related data (4) Retail client assets: Net asset inflow’ (billions of yen) (billions of yen) 8,000 6,000 5,000 sooo | 5978 49604928 ut 4,000 4,000 Eka 3,000 2,122 2,000 2,000 4,289 847 1,000 458 R 0 ° FY2011.3 FY2012.3 4. Retail client assets exclude portion from regional financia
Slide 31: Retail related data (5)
Retail related data (5) mber of accounts / IT share’ SS (thousands) Accounts with balance 3.953 4.165 4.467 4.883 4936 4.945 Equity holding accounts 1,853 2,027 2,347 2,572 2,695 2,696 2,243 2,765 3,005 3,189 3,328 3,348 Nomura Home Trade (online trading accounts) Full year z P2013 a New individual
Slide 32: Asset Management related data (1)
Asset Management related data (1) Fy2007.3 | FY2008.3 | FY2009.3 | FY2010.3 | FY2011.3 YoY (billions of yen) EES Pia Tza fsa Ta ta Net revenue 807 81.4 519 621-665 158 162 173 173 188 89% 19.5% Non-interest expenses 444 500 478 468 465 18 120 7 11.0 114 36.3 314 41 15. 20.0 40 4 4.2 56 6. 74 pens in
Slide 33: Asset Management related data (2)
Asset Management related data (2) Nomura Asset Management Domestic public investment trust market and assets under management’ Nomura Asset Management market share llions of yen) stl’ Naame sip {trillions of yen) Mar. 31, | Mar. 31, | Mar. 31, | Mar. 31,] Mar. 31, J Jun. 3( ba yee) 2007 2008 2009 20
Slide 34: Wholesale related data (1)
Wholesale related data (1) amaiabiadia a reuse eet |e | Global Markets 1573 6584 «= 5188 964 1444 1410 1370 1304 6.0% 34.9% investment Banking 64 (1311 «1117 122 190 311 «= 4941.2 TTA BZ Net revenue 1636 7895 6305 1086 1634 1722 1863 1412 -24.2% 30.0% Non-interest expenses 553.7 6143 623.8 1498 1558
Slide 35: Wholesale related data (2)
Wholesale related data (2) Private equity related investments (billions of yen) 600 543.4 400 300 200 100 i z Japan 195. 5 nee. 5 159.7 Europe (excluding Terra Firma) 35.7 41.4 ad aa — 29.2 Asia - - 3.2 3.6 3.3 3.2 ‘Sub Total 231.2 210.9 254.9 250.9 202.7 192.0 Terra Firma 312.2 170.5 114.4 119.2 12
Slide 36: Number of employees
Number of employees el it sot anal atts Japan (excluding FA)" 10,667 11,561 12,929 12,857 12,829 20,263 Japan (FA)? 2,174 2,377 2,391 2,196 2,089 2,096 Europe 1,791 1,956 4,294 4,369 4,353 4,436 Americas 1,322 1,063 1,079 1,781 2,348 2,383 Asia-Pacific? 900 1,070 4,933 5,171 5,252 6,452 Total 16,854
Slide 37: Nomura Holdings, Inc.
Nomura Holdings, Inc. www.nomura.com 37